India Energy Exchange (IEX) to start in 15 days

The country’s first power trading exchange, India Energy Exchange (IEX), will be up and running in the next 15 days. The project was earlier expected to be operational before the end of last fiscal but was later delayed. Mock drills have been carried out to eliminate anomalies in the system.

India Energy Exchange (IEX) is being promoted by Financial Technologies (India) Ltd and PTC India Ltd, with Reliance Energy, Tata Power Company, Lanco Infratech, Adani Enterprises, REC, and Infrastructure Development Finance Company (IDFC) being the other shareholders in it.

Operations of IEX
Initially, IEX will operate a day-ahead market with features like closed auction with double-side bidding and clearing at uniform price. “This will bring transparency and clarity to the power trading business, which will be driven solely by price and volumes,” Shekhar said.

Currently, the power trading market in India is pegged at 20 billion units a year with a growth rate of 33%. PTC India, the country’s sole public sector trading company, has near monopoly in this field. Last year, it traded close to 9.9 billion units. The day-ahead market is 15% of the total traded market of 20 billion units, Shekhar said. With greater acceptance and demand, products such as week-ahead, month-ahead, seasonal and one-year contracts will also be introduced.

Shekhar said that there would be no potential for speculation like in commodity exchanges because the IEX will deal only in deliverables for the next day. “It will be a physical market and all clearances will take place the very next day. There is no scope for non deliverables and non physical market at this exchange,” he said.

Types of Members in  India Energy Exchange

There will be two types of members under IEX - proprietary and professional. Proprietary members will be those that are grid connected-such as state utilities. They will be direct members.

According to PTC India director Shashi Shekhar, the infrastructure is now in place. “We are ready to start the day we get a green signal from CERC,” he said.